There is no flag to achieve this, but there is a simple solution using pandoc's filter functionallity. Internally, list items are represented as a list of blocks; a list is compact if all block items only consist of Plain blocks. If all items consist of only a single paragraph, then it is sufficient to change the type of the item block from Para (for paragraph) to Plain.

The Haskell program below does just that. Safe it and use it as a filter: pandoc -t markdown --filter the-filter.hs your-document.docx